Irish 'bad bank’ NAMA should be sold in one go

Ireland should sell the National Asset Management Agency (NAMA) in its
entirety once the body has made significant progress in disposing of the
toxic property loans it took on from the country’s banks.

Deloitte said that while banks will have to dramatically shrink the size of their asset books they are likely to face major challenge in doing so given the scale of the bad loan problems they face.

A secret report prepared for NAMA, which holds about €75bn (£64bn) of bad debt, said the organisation could be sold as a single entity and also recommended it take direct control of loans currently managed by Irish banks.

NAMA was set up as a “bad bank” in the midst of Ireland’s banking crisis to enable the country to create new banks unencumbered with toxic loans.

The emergence of the NAMA report comes as European banks face the need to dispose of a pool of toxic assets larger than the entire British economy if they are to return to profitability and meet new capital rules.

Estimates from accountants Deloitte found that European banks hold more than £1.5 trillion of non-core and non-performing assets on their balance sheets.

Deloitte estimates that while banks will have to drastically reduce the size of their asset books, they will probably encounter major challenges in doing so given the scale of the bad loan problems they face.